I’ve been really bothered recently by a myriad of companies and “profit strategists” trying to teach unknowing entrepreneurs and SMEs really short-term, non-strategic business lessons.
Hey, I’m not a “local business guru” or “Singapore’s highly sought after profit strategist” or any of that crap.
I’m just an average guy who happens to know some things about building a business through hard lessons and losing a lot of money in trial and error. There are many people more experienced and more successful than I am, and in no way am I claiming that I am a business veteran.
But the reason I’m writing this blog post is that many of these “business gurus” who are publicly making ridiculous claims are teaching really short-term stuff that doesn’t really help.
Some (read: maybe 1 or 2) of these “gurus” really know what they’re talking about, but most of them, from my experience and opinion, are full of hot air.
How do I know this?
Firstly, I am highly connected to the U.S and some venture capitalists over in Silicon Valley. I have learnt priceless lessons from them in building real companies. Most of what local business gurus teach are completely short term and lack proper strategy. That’s why students who attend these business guru courses never achieve the success they’re looking for.
Secondly, my partner and I started our company as two 26-year-old fools with just a low 5-figure sum, struggled for 12 months, had countless sleepless nights, and basically had to learn everything the hard way. We were fortunate enough to get some informal mentorship by entrepreneurs who built companies to the $20,000,000 in revenue mark and that changed our perspective on everything.
So with my limited business knowledge, I’d like to share 4 core truths I have learnt about building a company.
This is what I have learnt personally, so take it for what it’s worth.
Too many entrepreneurs and SMEs buy into grand promises, mostly due to impatience and lack of knowledge.
Don’t believe in the hype. There’s no secret system, there are no magic bullets, and there are no shortcuts. If there was, the people who are teaching you these secret systems should be Bill Gates already. They are not.
I’m a big believer of systems, but not secret systems.
There are no “plug and play email templates” or any other business templates that can work well for you.
Your brand is different; your business is different plain and simple. What works for someone else might not work for you. And besides, if you’re truly looking to build a big business, why would you want to copy someone else?
History has proven that pure copycats without any form of differentiation never succeed. Look at all the big companies you see today. They grew big because they had something unique and different to offer.
Using “templates” is the very mindset of a follower, not a leader. Let me give you an example of a “copywriting headline template” that won’t work.
A horrible copywriter once suggested a “headline template” that you can just plug and paste for your own business.
The headline went something like:
How to [fill in benefit] without [painful task]
Hey sounds great right? Those are great headlines.
But the problem with this template is that your business must really provide the solution that you’re promising in the headline. Can you really help people lose weight without exercising or some form of dieting?
99% of the time, it’s all hype.
This type of teaching by local business gurus shows a very shallow way of thinking that is typical of a non-strategic, mediocre follower.
Unless you’re a start up with a truly innovative solution, this headline template will probably only serve to get your customer’s attention, but I don’t think you will be able to deliver what is promised in the headline. Instead of copying a template for business success, you should follow a proven process or framework.
The most proven process I know is to fully understand your customers, develop a strong positioning from day 1, and figure out how to generate leads consistently, predictably, and profitably over time.
This is an on-going process that takes time. A lot of time.
The fastest growing startups in Silicon Valley run 10 marketing experiments per week to find out what works and what does not work. And even for them it takes many months or years.
They document their experiments down into a logbook to scientifically understand the thing factors that really result in business growth.
There is a process and framework, but not a template.
I’m not saying that all companies must do this. I’m saying this to highlight that fact that business growth is all about sticking to a process and framework of testing and learning.
Again, this is all back to the fact that what works for other companies might not work for you and for your particular brand.
This is probably the number 1 reason most SMEs fail.
To understand this concept, you need to take a step back and understand a little about economics. In economics, there is the concept of Monopoly vs Perfect Competition.
A Monopoly is an entity that is seen as the only choice for its particular market. Take Google for example. When you think of a search engine, you just go to Google. There are no other choices. Yahoo and Bing are there but nobody really ever uses them.
Another example is Facebook. It’s the only social network you will ever use. No other choices.
As local business owners, you will very rarely create a monopoly. According to Peter Thiel, former CEO of Paypal, creating a monopoly only comes with proprietary technology, economies of scale, network effects, and branding.
This is usually not achievable for local businesses and 95% of businesses out there period. Most of us will find ourselves in the other end of the spectrum: Perfect Competition.
>The world of Perfect Competition means that there are many companies fighting for the same market with similar offerings.
Profits will get diluted because customers have choice. Your business does not operate alone in a vacuum. You have tons of competitors, and you will make less money than monopolies. So in the world of perfect competition, you need to find and give your customers a reason why they should choose you.
And you achieve this with art and science of brand positioning.
95% of companies do not understand the concept of positioning. Needless to say, most business gurus have no clue about this. They might have heard of the concept, but they don’t truly understand it nor know how to execute it.
Brand positioning is basically the place in the customer’s mind that your company owns.
What do your customers know you for? Customer service? Premium quality services at affordable prices? We know Apple for beautiful design, and easy to use interfaces. We know Nike for making stylish and high performance shoes for athletes.
These are the positions they own in our minds.
What position will you own in your customer’s mind? If you don’t have a strong brand position, what happens is you will get easily forgotten and always compared with your competitors on price.
If you can’t answer the question: Why should customers choose you over anyone else?
Then your customers have no reason to choose you do they? They should just choose your competitors or whoever is cheaper.
So how do you answer this question?
There is an advanced process to finding out the answer to this question which you can find out more from our digital marketing agency Heroes of Digital.
Truth 3#: All great businesses have cracked the code to consistent and profitable lead generation
Many people don’t understand what a lead means. They think that a lead is just anyone. Every company listed in the yellow pages is not a lead. The database that you bought from a “lead generation” company does not mean it contains leads.
A lead is a potential customer who has expressed an interest in your product or service. Someone who signs up for a discount voucher is a lead. Someone who requests for a free trial session or class is a lead. Someone who requests for a consultation is a lead.
From my experience, consistent, profitable lead generation solves most business problems.
Consistently is the key word here.
A lot of business gurus teach you tips and tricks for lead generation that is really short term and not consistent.
You need to build a lead generation machine. A machine that will allow you to never worry for not getting new leads ever again. Building this machine takes time.
A lead generation machine usually involves a combination of finding a niche, picking 1-2 main key channels in digital marketing, creating a positioning strategy, continuous tracking, and continuous learning. This is a process.
But once you figure it out, your company can finally scale and grow quickly.
I’d like to elaborate a little on the importance of tracking and measuring your marketing.
Imagine not doing accounting for your business. You will have no idea where your cash ins coming in and going out. No business can function without proper accounting. Similarly, you cannot successful build a real business without understanding your numbers in marketing.
For all you know, you could be spending $2000 and making only $1000 as a result of that Google Adwords campaign.
You need to know how much you’re paying every month to generate how many new customers, how much that customer is worth to you, and etc. If you know that for every $1 that you pay, you eventually generate $2 back, then you have a machine that works.
Making the numbers work in your favor is what creates the machine.
The main pattern I see with many new entrepreneurs is jumping from opportunity to opportunity. I’ve been guilty of this myself when I first started out. Sadly, this is a recipe for failure and I had to learn it the hard way by losing $30,000 in personal savings.
When we started out, we were a generic digital marketing agency that did everything for everyone.
You need to consistently sell one product category or service well for only one core target market. This is the way to get remembered and stand out.
When we changed our focused to running Facebook lead generation for retailers, our revenue tripled within three months.
You need to stay consistent in your marketing efforts too.
When we started out, we tried everything. SEO, direct mail, cold calling, Facebook marketing, website design etc.
Because we didn’t do one thing consistently or long enough for results to start paying off. The key is to be consistent and stick with doing one thing long enough to determine whether it works or not.
Don’t jump from SEO to Google Adwords to Facebook in your marketing just because you spent $200 dollars and it doesn’t work. It doesn’t work now doesn’t mean it won’t work later. That’s because again, this whole business growth thing is a learning process.
We have had clients who worked with us and for the first 2 months, results were extremely poor.
But we stuck to our process and in the 3rd month, made some tweaks that helped the client generate 30 new customers in the first week.
Spending $200 on Facebook ads and seeing no results is not a big deal. The big deal is what can you learn from this failed campaign?
Stay focused to the process and learn from failures. You need to learn about your business everyday.
When you commit to doing something consistently, learning from failure, eventually you will find the formula for your success.
So that’s my 4 truths for truly growing a company. I’m not a business guru in any sense, but these 4 truths have worked for me based on my personal experience.
I hope they can help you as well.
If you are interested in growing your company, find out about our digital marketing strategies and campaigns at Heroes of Digital.